Investors lost N122.5bn as local stocks recoil gains resulting from selloffs in Dangote Cement, Zenith Bank, Nigerian Breweries

Charles Abuede

The equities market retreated from the gains recorded in the previous trading session due to selloffs in Dangote Cement (-3.5%), Zenith Bank (-1.4%) and Nigerian Breweries (-1.4%) pushed the NSE all share index southward by 0.60 per cent to 38,697.17 points. As a result, market year to date return loss worsened to -3.9 per cent and market capitalisation declined to N20.2 trillion while investors lost N122.5 billion. Thursday’s negative performance can largely be attributed to the selloff in the market’s heavyweight; Dangote Cement as investors persists in cautious trading following watered corporate actions thus far.

In a similar feat, trading activity level also declined as the volume and value of units traded slipped by 47.6 per cent and 53.8 per cent respectively to 169.4 million units and N2.1 billion. The most traded stocks by volume were Aiico Insurance (19.7m units), UBA (16.2m units), and Zenith Bank (11.5m units) while Dangote Cement (N550.8m), Seplat Petroleum (N299.5m), and GTBank (N251.7m) led by value.

Elsewhere, the sectorial performance was uneven with more traction towards the bullish pole as the Insurance index was the top gainer (+0.7%), due to bargain hunting in Aiico Insurance (+4.3%), NEM Insurance (+5.1%), and Consolidated Hallmark Insurance Plc (+7.4%). Similarly, the consumer goods (+0.4%) and Banking (+0.01%) sectors closed north respectively following price appreciation in International Breweries (+9.9%), Champion Breweries (+9.1%), GTBank (+0.8%), and Ecobank (+3.0%)., while the Industrial goods (-1.7%) was the lone laggard, due to sell-offs in Dangote Cement (-3.5%) and Oil & Gas (-0.0%) sectors closed south.

Also, investor sentiment as measured by market breadth strengthened to 2.0x from the 1.1x recorded previously as 22 stocks advanced against 11 decliners. Smurfit (+10.0%), International Breweries  (+9.9%) and Champion Breweries (+9.1%) were the top gainers while African Insurance (-8.3%), Sovereign Insurance (-7.1%) and Mutual Benefit (-7.1%) were the top losers.

NSE 30

The NSE 30 Index decreased by 0.57 per cent to close at 1,539.11 points as against 1,547.94 points as on the previous day. Market turnover closed with a traded volume of 69.19 million units. International Breweries and Ecobank were the key gainers, while Dangote Cement and Zenith were the key losers.

Foreign exchange market

In the foreign exchange market, the Naira settled flat at N484 to the dollar in the parallel market while at the I&E FX market, Naira appreciated by 0.52 per cent as the dollar was quoted at N409 as against the last close of N411.13 per dollar. Most participants maintained bids between N390.00 and N415 per dollar.

Treasury Bills

In the treasury bills market, selloffs characterized trading as investors exited their position across the intermediate to long end of the bill market. Against this backdrop, the average yield firmed up by 74 basis points to log at 2.8 per cent day-on-day from 2.10 per cent on the previous day. The average yields across medium-term and long-term maturities expanded by 146 basis points and 75 basis points, respectively. However, the average yield across short-term maturities closed flat at 0.61 per cent. Yields on 12 bills advanced with the 15-Jul-21 maturity bill recording the highest yield increase of 208 basis points, while yields on 8 bills remained unchanged.

Moreover, the CBN held its scheduled Primary Market Auction on March 10, selling NT-Bills worth N108.8 billion (approx N19.9 billion more than the offered amount of N88.9) across the 91-day (N4.7 billion), 182-day (N23.5 billion), and 364-day (N80.6 billion) tenors. The stop rates for the 91-day and 182-day tenors remained unchanged at 2 per cent and 3.50 per cent, respectively. However, the stop rate for the 364-day tenor cleared higher at 6.50 per cent (+100 bps), which is the highest level witnessed since February 2020. The auction was oversubscribed by 121 per cent, with bid-to-cover ratios settling at 4.17x (91-day), 3.79x (182-day), and 1.78x (364-day).

In the OMO bills market, the average yield across the curve increased by 2 basis points to close at 6.83 per cent as against the last close of 6.81 per cent. Selling pressure was seen across long-term maturities with average yields rising by 10 basis points. However, the average yields across short-term maturities declined by 7 basis points, while the average yield across medium-term maturities remained unchanged. Yields on 3 bills advanced with the 8-Feb-22 bill registering the highest yield increase of 38 basis points, while yields on 22 bills remained unchanged.

Bond market

In the FGN bonds market, the bears resurfaced, stoking the average bond yield across the curve cleared higher by 30 basis points to close at 5.78 per cent from 5.48 per cent on the previous day. Average yields across the short tenor and the medium tenor of the curve increased by 36 basis points and 18 basis points, respectively. However, the average yields across the long tenor declined by 3 basis points. The 27-MAR-2050 maturity bond was the best performer with a decline in the yield of 14 basis points, while the FGNSB 11-SEP-2021 bond was the worst performer with an increase in yield of 154 basis points.